Sales tax to cover schools to sewers

Tax revenue would give city $80 million over five years

Posted: Tuesday, September 26, 2000

Proposition 1 asks voters to renew for five years the temporary 3 percent sales tax that runs out June 30, 2002.

The tax is expected to bring more than $80 million into city coffers money the Juneau Assembly intends to spend on services such as schools, police and fire protection, roads, drainage, stairs and sidewalks, water and sewer system extensions, youth activities, and the emergency budget reserve, which now amounts to $6.8 million.

Proceeds from the tax are essential to conducting the city's business, according to City Manager Dave Palmer. "If we don't have the money, the services we provide are going to change in a dramatic way," Palmer said. "It's a third of the $52 million general fund budget."

Capital projects the tax will fund include a major revamping of Gastineau Avenue, as well as building maintenance and Parks and Recreation facilities maintenance, he said. "Basically, the tax funds all the city work that we do."

Opposition to the tax appears to stem more from objections about who and what is taxed than about how proceeds will be spent.

"I'm in favor of everything that's to be funded by those taxes," said Juneau resident Dennis Harris. "But sales taxes are extremely regressive. It's just not fair that a single mom with three kids and a deadbeat dad has to pay taxes on groceries while major corporations like Alascom and Exxon are exempt from paying sales tax on lobbying services."

The city doesn't collect sales tax on rent, medical services or prescriptions and should exempt groceries, Harris said. "The necessities of life should not be taxed."

Juneau voters have consistently supported and opted to renew sales taxes earmarked for basic government services, according to city sales tax administrator Joan Roomsburg.

And the city, anxious about keeping its fiscal workhorse going, has consistently put the tax on the ballot a year-and-a-half before it runs out. The rationale, expressed by several Juneau Assembly members, has been that if the measure should fail, the city administration would have time to put it before voters again.

The 3 percent temporary sales tax for the city's basic services first appeared on the ballot under three, separate 1 percent measures in 1983. Proceeds from those taxes were parceled out as follows: 2 percent for water utility expansion, 0.5 percent for additional water work and 0.5 percent for capital improvements.

The measures were to end in June of 1988, and so were put on the fall 1986 ballot as one 3 percent tax, this time for four years. One percent of the proceeds was earmarked for city operations, 1.25 percent for water system expansion and 0.75 percent for roads, streets and similar projects.

Voters renewed the measure for five years in 1990. The assembly set aside 1 percent for operations and 1 percent for streets, drainage and similar projects. The assembly split the final percent between capital projects and the emergency budget reserve fund.

1997's renewal went on the 1995 ballot and funded city operations and roads as before. But this time the third percent was divided among capital projects, the emergency reserve fund and youth activities. Youth activity funding has added up to $400,000 during that tax's tenure, Roomsburg said. The tax will end in June 2002.

Since city-borough unification in 1971, voters have approved nine temporary sales tax levies and turned down three. Of the latter, one was for a $7 million ice rink in 1991, another for a recreation endowment fund in 1991 and the third for building a state government center in 1992.

Wednesday Empire campaign coverage will focus on Proposition 2, which would extend the 1 percent temporary sales tax to fund hospital, school and ice rink work.

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